Blockchain Terminology

The following glossary of terms is available to assist you in gaining requisite knowledge as you explore the blockchain landscape. Links to further information for each term are also provided.

Term

Definition

51% attack

The ability of someone controlling a majority of a network hash rate to revise transaction history and prevent new transactions from confirming. [Source]

Altcoin

Units of value and modes of exchange that originate from its parent blockchain. [Source]

Bitcoin

A type of cryptocurrency that uses peer-to-peer technology to operate with no central authority or banks. Instead, the network collectively manages transactions and the issuing of bitcoins. Bitcoin is open-source and its design is public; nobody owns or controls Bitcoin, and everyone can take part. [Source]One of the most commonly known applications of blockchain. As a peer-to-peer digital currency without a central administrator, the U.S. Treasury categorizes Bitcoin as a decentralized virtual currency. The underlying DLT of Bitcoin is also indicated as the Bitcoin blockchain, to distinguish it from other blockchain technologies. [Source]

blockchain

Distributed digital ledgers of cryptographically signed transactions that are grouped into blocks. After validation and undergoing a consensus decision, each block is cryptographically linked to the previous one, making it tamper-evident. As new blocks are added, older blocks become more difficult to modify, creating tamper resistance. New blocks are replicated across copies of the ledger within the network, and any conflicts are resolved automatically using established rules. [Source]

A fault presenting different symptoms to different observers. [Source]

Byzantine generals’ problem

In blockchain, how to reach consensus among the untrustworthy nodes is a transformation of the Byzantine generals’ problem, in which a group of generals who command a portion of the Byzantine army circle the city. Some generals prefer to attack, while others prefer to retreat. However, the attack would fail if only some of the generals attack, so, they must reach an agreement to attack or retreat. How to reach a consensus in distributed environment is a challenge. Similarly, it is a challenge for blockchain as the blockchain network is distributed, and there is no central node that ensures ledgers on distributed nodes are all the same. Some protocols are needed to ensure ledgers in different nodes are consistent. [Source]

consensus algorithm / mechanism

For an entry to be appended to the ledger, consensus about the entry needs to be reached in the network, i.e., an agreement must be reached regarding the validity of a new entry that is to be appended to the ledger by all nodes. The assumption is that a supermajority of nodes are honest and reliable. [Source]Each node, or network participant, continuously synchronizes the blockchain as consensus is achieved according to the specific consensus protocol of that network. This consensus ensures the validity and consistency of each copy of the distributed ledger running on each node of the blockchain network. [Source]

cryptocurrency

Electronic cash protected through cryptographic mechanisms instead of a central repository or authority. The first such blockchain-based cryptocurrency was Bitcoin. [Source]

cryptography

The science of protecting information by transforming it into a secure format. Cryptography is used to protect digital data. It is a division of computer science that focuses on transforming data into formats that cannot be recognized by unauthorized users. [Source]

data provenance

The origins, custody, and ownership of research data. Because datasets are used and reformulated or reworked to create new data, provenance is important to trace newly designed or repurposed data back to its original datasets. The concept of provenance guarantees that data creators are held accountable for their work, and provides a chain of information where data can be tracked as researchers use other researchers’ data and adapt it for their own purposes. [Source]

decentralized applications (dApps)

Applications that run on a P2P network of computers rather than a single computer. dApps have existed since the advent of P2P networks. They are software program designed to exist on the internet in a way that is not controlled by any single entity. [Source]

decentralized autonomous organization (DAO)

An organization that is run through rules encoded as smart contracts running on the blockchain. Due to its autonomous and automatic nature, a DAO’s cost and profit are shared by all participants by simply recording all activities into the blocks. [Source]

Demilitarized zone (DMZ)

A host or network that acts as a secure and intermediate network or path between an organization's internal network and the external, or non-propriety, network. [Source]

digital signature

A cryptographic technique that utilizes asymmetric keys to determine authenticity (users can verify that the message was signed with a private key corresponding to the specified public key); non-repudiation (a user cannot deny having sent a message); and integrity (the message was not altered during transmission). [Source]

Directed Acyclic Graph (DAG)

There are two main topologies in DLT systems, blockchain and DAG. Blockchain is a continuously growing list of blocks, linked and secured using cryptography. By contrast, the DAG builds a graph of transactions. Since transactions do not need to wait to be included in blocks, they can be quickly confirmed in DAG when they are received by a node.[Source]The most notable difference between the two is that blockchains bundle transactions in cryptographically linked blocks forming a single chain containing the global truth, while DAGs use a graph where a transaction is represented as a node in the graph.[Source]

distributed ledger technology (DLT)

A consensus of replicated, shared and synchronized data geographically spread across a network of multiple nodes. There is no central administrator or centralized data storage. Using a consensus algorithm, any changes to the ledger are reflected in the copies. The security and accuracy of the ledger are maintained cryptographically according to rules agreed by the network. Blockchain is one form of distributed ledger design. [Source]Enables the maintenance of a global, append-only data structure by a set of mutually untrusted participants in a distributed environment. The most notable features of distributed ledgers are immutability, resistance to censorship, decentralized maintenance, and limitation of the need for a centralized trusted third party. [Source]

double spending

Transacting with the same set of digital assets more than once. This is a problem that has plagued many digital money systems, and one that most blockchain networks are designed to prevent. [Source]

Ethereum

A decentralized platform that runs smart contracts, which are applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. [Source]

fiat money

Money that is deemed legal tender by a government and that can be used to settle a transaction (e.g. USD, EUR, JPY). [Source]A currency without intrinsic value that has been established as money, often by government regulation. Fiat money does not have use value; it has value only because a government maintains its value, or because parties engaging in exchange agree on its value. [Source]

fork

Changes to a blockchain network’s protocol and data structures. [Source]

General Data Protection Regulation (GDPR)

This Regulation establishes rules relating to the protection of natural persons with regard to the processing of personal data and rules relating to the free movement and protection of personal data.The free movement of personal data within the Union shall be neither restricted nor prohibited for reasons connected with the protection of natural persons with regard to the processing of personal data. [Source]

genesis block

The first block of a blockchain network. It records the initial state of the system. [Source]

hashing

A method of calculating a relatively unique output (called a hash digest) for an input of nearly any size (file, text, image, etc.) by applying a cryptographic hash function to the input data. [Source]A hash is a function that takes some arbitrary input and returns a fixed-length value. The particular value depends on the given hash algorithm in use, such as SHA-1 (used by Git), SHA-256, or BLAKE2; but a given hash algorithm always returns the same value for a given input. [Source]All the blocks in the blockchain are linked using the hash, which is generated using a cryptographic one-way hash function (e.g., SHA256). It also ensures anonymity, immutability and compactness of the block. [Source]

Hyperledger

An open-source collaborative effort created to advance cross-industry blockchain technologies. It is a global collaboration, hosted by the Linux Foundation, including leaders in finance, banking, Internet of Things, supply chains, manufacturing and technology. [Source]

immutable

Data that can only be written - not modified or deleted. [Source]Clinical data or metadata are securely distributed across multiple entities, ensuring integrity, lowering the risk of loss, and offering an audit trail (in case of malicious actor). Append-only model of blockchain ensures all providers with access to information have a complete clinical picture. [Source]

InterPlanetary File System (IPFS)

A protocol and network designed to create a content-addressable, peer-to-peer method of storing and sharing hypermedia in a distributed file system. [Source, Source]Off-chain encrypted decentralized storage [Source]

latency

The time interval between the creation of a transaction until the initial confirmation of it being accepted by the network. [Source]

Merkle Tree

A data structure that is used in computer science applications. In bitcoin and other cryptocurrencies​, Merkle trees serve to encode blockchain data more efficiently and securely. Also referred to as "binary hash trees." [Source]

metadata

Structured information about an information resource that describes, explains, locates or otherwise makes it easier to retrieve, use, or manage that resource. [Source]

miners

The bitcoin blockchain operates in a peer-to-peer fashion with all transactions distributed to each network maintainer node (called a “miner”) for verification and admittance onto the blockchain. Miners validate available transactions and group them into blocks. They then compete in solving a computationally expensive cryptographic puzzle, known as “proof of work,” where a targeted hash value associated with the last valid block in the chain is calculated. The first miner to solve this puzzle receives a reward (i.e., an amount of Bitcoin) and appends their block of validated transactions to the blockchain sequence. [Source]

mining

The act of solving a puzzle within a proof-of-work consensus model. [Source]

network

In information technology, a series of points, or nodes, interconnected by communication paths for the purpose of transmitting, receiving and exchanging data, voice and video traffic. [Source]

network, private

A network that is not open to the public. The network originator must grant permission for use. [Source]

network, public

A network that is open to the public and requires no defined permissions for use. [Source]

A number, used only once, added to a hashed block that, when rehashed, meets the difficulty level restrictions. The nonce is the number for which blockchain miners are solving. [Source]

off-chain

Refers to transactions that take place outside of the blockchain network. [Source]

on-chain

Refers to transactions that take place within the blockchain network. [Source]

peer-to-peer (P2P)

Refers to systems that work like an organized collective by allowing each individual to interact directly with others. In the case of Bitcoin, the network is built in such a way that each user broadcasts the transactions of other users; no bank is required as a third party. [Source]

permissioned

Participation on a private network, controlled by the originator of the network. [Source]Permissioned blockchain networks limit participation to specific people or organizations and allow finer grained controls. Only particular users can publish blocks. Permissioned blockchain networks are often deployed for a group of organizations and individuals, typically referred to as a consortium.The establishment of one’s identity is required to participate as a member of the permissioned blockchain network; those maintaining the blockchain have a level of trust with each other, since they have all been authorized to publish blocks and since their authorization can be revoked if they misbehave. Consensus models in permissioned blockchain networks are usually faster and less computationally expensive. [Source]

permissionless

Participation on a public blockchain network, open to anyone. [Source]A blockchain network characteristic that allows anyone to anonymously create accounts and participate. Anyone can read and write to the blockchain without authorization. [Source]

Practical Byzantine Fault Tolerance (PBFT)

An algorithm that is relied upon in order to establish consensus within a blockchain system. [Source]

private key

The private portion of a keypair, which can create signatures that other people can verify using the public key. [Source]

proof of authority (PoA)

A consensus model that applies only to permissioned blockchain networks with high levels of trust. [Source]

In this model, transactions are validated by approved accounts given validator authority. [Source]

proof of elapsed time (PoET)

A consensus model where each publishing node requests a wait time from a secure hardware time source within its computer system. The secure hardware time source will generate a random wait time and return it to the publishing node software. Publishing nodes take the time they are given and become idle for that duration. Once a publishing node wakes up from the idle state, it creates and publishes a block to the blockchain network, alerting the other nodes of the new block; any publishing node that is still idle will stop waiting, and the entire process will start over. [Source]

proof of stake (PoS)

A consensus criteria. A type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus. [Source]Blocks are not created by miners doing work, but by minters staking their tokens to “bet” on which blocks are valid. In the case of a fork, minters spend their tokens voting on which fork to support. Assuming most people vote on the correct fork, validators who voted on the wrong fork would “lose their stake” in the correct one. [Source]Hardware-based mining is replaced by a virtual stake in the given network. [Source: 2017 Dhillon, Metcalf, Hooper, p.26]

proof of work (PoW)

A consensus model where a publishing node wins the right to publish the next block by expending time, energy and computational cycles to solve a hard-to-solve, but easy-to-verify problem (e.g., finding the nonce which, when combined with the data to be added to the block, will result in a specific output pattern). [Source]

public key

The public portion of a keypair, which can be used to verify signatures made with the private portion of the keypair. [Source]

smart contracts

A computer protocol intended to digitally facilitate, verify, or enforce the negotiation or performance of a contract. Smart contracts allow the performance of credible transactions without third parties. These transactions are trackable and irreversible. [Source]A collection of code and data (sometimes referred to as functions and state) that is deployed using cryptographically signed transactions on the blockchain network. The smart contract is executed by nodes within the network; all nodes must derive the same results for the execution, and the results of execution are recorded on the blockchain. [Source]

A digital item or tradeable asset that is built on top of another such digital item, e.g., ERC20 tokens are traded via network transactions on the Ethereum platform. [Source]

wallet

The wallet contains a user’s private key(s), which allow users to spend the cryptocurrency allocated to it in the blockchain. Each wallet can show the user the total balance of all coins it controls and lets the user pay a specific amount to a specific person, similar to a real wallet.[Source]